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Will cryptocurrency bill 2022 emerge?

Cryptocurrency bill 2022 in Japan and the US. A review by a Bitcoin mixer: mixer.money
Will cryptocurrency bill 2022 emerge?

  1. US
  2. The rise of regulators
  3. Japanese coins
  4. Fraud

Falling prices, problems with stablecoins and a rise in hacking reports have not passed regulators’ notice. Another cryptocurrency bill 2022 appeared in two countries at once – the US and Japan.

Over the weekend, the US and Japan announced broad rules related to cryptocurrency. Another attempt to come up with applicable legislation is coming.

US

The US cryptocurrency bill, which was unveiled Tuesday and is about 70 pages long, has to go through Congress for approval and could change accordingly. It is being advertised as the industry’s first bipartisan legislation. That is a development in itself, given that the Republican and Democratic parties can barely agree on anything.

The bill classifies decentralized cryptocurrencies as commodities, and is under the jurisdiction of the Commodity Futures Trading Commission, rather than – to the relief of many in the crypto world – the Securities and Exchange Commission (SEC).

Cryptocurrency bill 2022 in the United States. A review by a Bitcoin mixer: mixer.money.

However, the bill proposes that centralized crypto assets, which function similarly to securities, be subject to SEC scrutiny. SEC Chairman Gary Gensler has previously made it clear that he favors stricter regulation of cryptocurrencies.

Clarity on crypto legislation in the US and Japan is a good start, as these are two of the top three economies in the world, but officials in the cryptocurrency industry have pointed to the need for cross-border rules to cover digital assets.

As of today, governments in many countries, including South Korea, India and the Philippines, are mulling legislation that ranges from threatening to tax cryptocurrency, creating a structure of rules for dealing with private digital money, replacing it with government versions or all of the above. China simply banned cryptocurrency directly.

The rise of regulators

So far this year has been defined by the downturn in the crypto markets, but could 2022 also turn into the year of the regulator?

The US bill known as the Responsible Financial Innovation Act is being led by Democratic Senator Kirsten Gillibrand and Republican Senator Cynthia Lummis. It would create a complete regulatory framework for digital assets, Gillibrand’s office said.

“The United States is the global financial leader, and to ensure the next generation of Americans enjoys greater opportunity, it is critical to integrate digital assets into existing law and to harness the efficiency and transparency of this asset class while addressing risk”, Gillibrand said in a statement.

Blockchain Association Executive Director Christine Smith said, “The bipartisan legislation announced today by Senators Lummis and Gillibrand represents a major moment for cryptopolitics and an important step forward for the crypto industry in Washington.”

However, the statement did not impress everyone.

“This compromise bill would weaken existing investor protections under the guise of increasing them so that maybe this time [the crypto] industry will follow the law,” tweeted Todd Phillips, director of financial regulation and corporate governance at the progressive think tank Center for American Progress. He argues that the industry is already sufficiently regulated but not compliant.

Japanese coins

Lawmakers in Japan on Friday passed the world’s first bill to provide legal protections for stablecoin investors. The bill has been in the works for some time under the Financial Services Agency (FSA), but it is particularly relevant after the $40 billion TerraUST (USTC) crash last month, a debacle that appears to have piqued regulators’ interest.

Japan's cryptocurrency bill is 248 pages long

Japan’s bill, introduced as an amendment to the Payment Services Act, is 248 pages long, but comes with a helpful summary from the FSA.

The summary says the bill provides a regulatory framework for issuers and intermediaries to process so-called stable coins and will provide transaction monitoring as well as customer identification and money laundering prevention obligations.

It appears that under the new law, only banks and trust companies will be allowed to issue stable coins.

The provision has already faced criticism because it will freeze small, innovative companies as well as foreign operators, Nikkei newspaper reported, citing Yosuke Shiraishi, head of stablecoin department at the Japan Business Association Cryptoasset.

Fraud

Laws and regulations exist to enforce rules and prevent crime, and the crypto industry has distinguished itself for its share of fraud. Even high-profile NFT collectors are not immune to phishing scams that use official Discord channels to defraud holders.

According to analyst firm Chainalysis, illegal activity was responsible for $14 billion in transactions last year – nearly 44 percent more than the previous year – and fraud accounted for most of that figure.

While this is a huge amount of money, it can be viewed in different ways. When you factor in the stratospheric growth of the crypto industry in 2021, total fraud is only 0.15% of total crypto transactions for the year – a 75% decrease from the previous year. This may be little consolation to the fraud victim.

 Crypto crime report 2022

“Crime gets so much attention, but it is actually less than 1% of the transactions that happen on blockchain, and we really have to try to keep it that way,” said Caroline Malcolm, head of international public policy and research at analyst firm Chainalysis. “It is important to deal with that, but it is also important to recognize the value that the ecosystem brings.”

These problems, combined with the aftermath of the stablecoin crash, seem to be what drove regulators to act.


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